Harvey Norman Scaling Back ‘Unimpressive’ Online Operation

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As JB Hi Fi boasts of online growth of 87.7% and traffic of over 900,000 unique visitors a week, Harvey Norman is looking to scale back their online operations claiming “unimpressive” results.Chief executive Gerry Harvey told AAP during the weekend the company’s recent online trading figures had been unimpressive. “We’re happy with our presence, we’re happy with our site, we’re not happy with our sales,” Gerry Harvey said.

His decision to scale back comes as major consumer electronic and IT retailers around the world look to expand their online operations.

At the recent CES Show in Las Vegas, Best Buy’s CEO, Brian Dunn, told ChannelNews that his online operation was a critical part of their operation as it drove consumers into stores to pick up goods while providing consumers with a choice of how they want to engage with Best Buy.

It was only a few months ago that Harvey Norman was telling the market that it planned to conduct five per cent of its trade online. Now that appears this target is out of sight for the struggling retailer who reported a 6.1% fall in sales in their Harvey Norman stores and a pre-tax earnings fell of 17.69% to the end of December.

Harvey said that current sales are “sitting at about 0.5 of one per cent” of the group’s total turnover. The company was revising downward its original target of five per cent of trade online within two years to between one and two per cent.

JB Hi Fi reported recently that total online sales for the first half were $25.7m or 1.4% of sales.

They said that they were attracting a high number of unique visitors per week with this peaking at 1.4m per week in December 2011.

 

The Australian newspaper said that Harvey Norman’s recent online experience does not tally up with February’s National Australia Bank (NAB) Online Retail Sales Index, which showed online represented 4.9 per cent of Australia’s $216 billion retailing industry.

Mr Harvey said there was a widespread misconception that large volumes of sales were driven through online retailing.

In an effort to diversify its product range, Harvey Norman has begun stocking motorbikes, sporting goods, boats, musical instruments, homewares and billiard tables.

“We just like to do a lot of things to make a dollar, I guess, because it’s so difficult in the area we’re in,” Mr Harvey said.

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